May 8, 2014

Summary of Consolidated Financial Results for the Year Ended March 31, 2014
Company name:

SRA Holdings, Inc.
(URL: http://www.sra-hd.co.jp/)
Tokyo Stock Exchange

Stock listing:Code number:President:
For inquiries, please contact:
Tel:

3817
Toru Kashima
Makoto Kitai, General Manager, Finance Department, Administrative Headquarters(03)-5979-2666
Date of ordinary general meeting of shareholders:June 26, 2014
Scheduled commencement of dividend payment:
June 12, 2014
Scheduled date of submission of financial reports:
June 27, 2014
Results Supplement Materials: Yes
Results Presentation Meeting : Yes (for institutional investors)

1. Consolidated Financial Results for Fiscal 2014(from April 1, 2013 to March 31, 2014)(All amounts rounded down, % change YoY)
(1) Consolidated Operating Results
Net Sales

Fiscal 2014
Fiscal 2013

Operating Income

Ordinary Profit

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

35,14632,168

9.3
（3.7）

2,807
2,436

15.2
（2.2）

3,324
2,883

15.3
8.6

2,134
1,681

27.0
36.3

Attention：Comprehensive Income
Fiscal 2014: ¥ 2,162million（(1.9)％）
Fiscal 2013: ¥ 2,204million（80.7％）
Net Income
per Share

Yen

Ratio of Net Income
to Shareholders’Equity%166.79127.85

12.4
10.2

Net Income per Shareafter Dilution

Yen
Fiscal 2014168.05
Fiscal 2013127.96
Reference: Gain (loss) on equity method investments:
Fiscal 2014: —Fiscal 2013: —Ratio of Ordinary
Profit to Total Assets

Ordinary Profit
Ratio

%

%

11.5
10.4

8.0
7.6

(2) Consolidated Financial Position
Millions of yen%

Shareholders’ Equity
per Share
Yen

17,083
17,35957.7
61.6

1,427.78
1,318.26

Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

Cash and Cash Equivalents
at the End of Period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

2,131
1,622

192
(2,896)(2,065)
(906)

7,909
7,497

Total Assets

Net Assets

Millions of yen
Fiscal 2014
29,527
Fiscal 2013
28,133
Reference: Shareholders’ equity
Fiscal 2014: ¥ 17,051 million
Fiscal 2013: ¥ 17,319 million

Shareholders’ Equity Ratio(3) Consolidated Cash Flows

Fiscal 2014
Fiscal 2013

2. Dividends
Dividend per Share
Record dateFiscal 2013
Fiscal 2014

End ofFirst
Quarter

End ofSecondQuarter

End ofThird
QuarterYear-end

For theyear

Total
Dividends(for the year)

Dividend
Propensity(consolidated)

Net Assets to
Dividend
Ratio(consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%

－
－
－

0.00
0.00
17.00

－
－
－

45.00
40.00
28.00

45.00
40.00
45.00

591
477
―

35.2
23.8
24.1

3.6
2.9
―

Fiscal 2015(forecast)
Attention： Year-end dividend per share for fiscal 2013: ordinary dividend ¥40.00, special dividend ¥5.00

1

3. Consolidated Earnings Forecast for Fiscal 2015 (from April 1, 2014 to March 31, 2015)

Net Sales（% change YoY is for the fiscal year or for interim period）
Net Income
Ordinary Profit
Net Income
per Share

Operating Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

17,00037,300

4.2
6.1

1,130
3,260

17.0
16.1

1,230
3,460

3.0
4.1

790
2,230

18.8
4.5

66.15
186.73

Interim Period
Full Year

4. Others(1) Changes to significant subsidiaries during the current period :No

Note: Changes in specified subsidiaries during the current period that caused changes in the scope of consolidation(2) Application of simplified accounting and application of special accounting :No

Note: Application of simplified and special accounting for quarterly consolidated financial statements(3) Changes in accounting principles, changes in accounting estimates, and restatements
1. Changes caused by revision of accounting standards, etc. :Yes
2. Changes other than 1. above:No
3. Changes in accounting estimates:
No
4. Restatements:
No(4) Number of outstanding shares (common shares)
1. Shares issued at the end of term (including own shares)
Fiscal 2014: 15,240,000 sharesFiscal 2013: 15,240,000 shares
2. Own shares at end of term
Fiscal 2014: 3,297,610 sharesFiscal 2013: 2,101,709 shares
3. Average number of shares over period
Fiscal 2014: 12,699,866 sharesFiscal 2013: 13,138,321 shares[Reference] Summary of non-consolidated financial results（Reference）Non-Consolidated Financial Results for Fiscal 2014 (from April 1, 2013 to March 31, 2014)(% change YoY)
(1) Non-Consolidated Operating Results
Net Sales

Fiscal 2014
Fiscal 2013

Operating Income

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

2,541
1,192

113.2
(3.9)

2,224
856

159.7
0.3

2,210
846

161.2
1.1

2,155
845

155.1
2.3

Net Income
per Share
Fiscal 2014
Fiscal 2013

Ordinary Profit

Net Income per Shareafter Dilution

Yen

Yen

155.1958.98

154.1358.93(2) Non-Consolidated Financial Position
Net Income

Net Assets

Shareholders’ Equity Ratio

Millions of yen

Millions of yen%

Shareholders’ Equity
per Share
Yen

9,452
9,404
99.1
713.64
9,457
9,417
99.2
654.47
Reference: Shareholders’ equity:
Fiscal 2014: ¥ 9,371million
Fiscal 2013: ¥ 9,377 million
Note: Forecast performance is predicted by the Company based on information currently available at the time of theforecast. Actual financial results may differ due to a number of factors.
Fiscal 2014
Fiscal 2013

2

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

1. Analysis of Business Results and Financial Position(1) Analysis of Business Results(Business results for the fiscal year)
During the fiscal year (April 1, 2013 to March 31, 2014), the Japanese economy recovered moderately due to suchfactors as increases in personal consumption and production as well as to an improvement in corporate earnings.
In the information services industry, despite an ongoing recovery in IT investments, the environment for securing
orders remained severe due to intensifying competition.
Amid this business environment, in the third year of its Medium-Term Management Plan, the SRA HoldingsGroup implemented the following specific measures in line with efforts to “undertake structural reforms in existing
businesses” as well as our “own IP products business*” x “overseas business,” which is our medium- and long-term
growth strategy.
*

Own IP products business: Business for our own-brand products covered by intellectual property rights■Undertake structural reforms in existing businesses
As measures to expand orders and sales by strengthening business capabilities, we created new projects throughproposal-based sales and strengthened our order management structure. As a result of these efforts, Advanced
Integration Technology, Inc. (AIT) and Software Research Associates Nishi-Nihon, Inc. recorded increases in sales
over the same period of the previous fiscal year. However, SRA AMERICA, INC. posted lower sales due to areactionary decline after securing large-scale projects up to the previous fiscal year.
Meanwhile, to build a high-profit production structure we continued to promote initiatives for strengthening ourstaff allocation management and realizing an appropriate level of production overhead costs. As a result, the Systems
Development business achieved a gross profit margin exceeding 20% for the third consecutive quarter.
■“Own IP products business” x “overseas business”
We made additional business investments in Proxim Wireless Corporation, Shenzhen Kingnet Technology Co., Ltd.
(Kingnet) and Cavirin Systems, Inc. with the aim of further implementing our medium- and long-term growthstrategy of promoting our own IP products business in China, India, ASEAN and other growth markets.
In our own IP products business in Japan, we focused on expanding sales of such products as our comprehensive
education solutions UniVision, our mail archive MailDepot, our digital content service BELEGA-DC and our EC
building service BELEGA-EC.
In the healthcare field, where markets are expected to grow, we made a business investment in Practechs, Inc. as
an initiative for developing a new business model. Along with this investment, we collaborated with Practechs anddeveloped and began providing the HEALTHPLAYER* application for smartphones.
*

HEALTHPLAYER utilizes cloud computing to safely record and store such healthcare data as a person’s height, weight, and calorie

consumption that are obtained from users via their smartphones and other devices. This application is useful for personal healthmanagement. Practechs is using Software Research Associates, Inc. (SRA)’s recommendation technologies and performing analysis for
distributing articles and related advertisements, such as those about lifestyle modifications, tailored to the health condition of eachindividual user.

Due to the above initiatives, our consolidated business results for the fiscal year were as follows.
3

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

In terms of net sales, all business segments, specifically the Systems Development business, the System
Operations and Infrastructure Development business and the Product Sales business, recorded increases in net sales.
As a result, consolidated net sales amounted to ¥35,146 million, a 9.3% increase from the same period of the previous
fiscal year.
At the profit level, operating income rose 15.2% from the same period of the previous fiscal year to ¥2,807
million due to an increase in gross profit accompanying growth in sales. Ordinary profit rose 15.3% from the same
period of the previous fiscal year to ¥3,324 million. Net income increased 27.0% to ¥2,134 million due to gain on
revision of retirement benefit plans that was recorded as an extraordinary gain.
A loss on valuation of investment securities recorded as an extraordinary loss in the first quarter was no longer
required to be recorded in the fiscal year under review because of a recovery in stock prices.
As detailed above regarding consolidated results for the fiscal year, net sales increased from the previous fiscal
year, while operating income, ordinary profit and net income all posted marked increases.
Net sales and operating income were below our full-year forecast while the figures for ordinary profit and net
income exceeded our fiscal year forecast.
Consolidated Business Results(Millions of Yen)FY2010FY2011FY2012FY2013

Net sales

34,05333,16433,41632,168FY2014
Most recent forecast
figures(announced
May 9, 2013)
34,900Operating income

1,997

2,238

2,490

2,436

2,900

2,807

Ordinary profit

2,059

2,374

2,656

2,883

3,000

3,324

Net income

1,238

1,313

1,233

1,681

1,860

2,134

Actual
35,146

A summary of consolidated business results for the fiscal year by business segment is shown below.
1) Systems Development
Despite a decline in sales to electric power and manufacturing industries, the Systems Development businessrecorded increases in sales to banks and securities companies. As a result, net sales edged up 5.5% from the same
period of the previous fiscal year to ¥18,364 million.
2) System Operations and Infrastructure Development
Although there was a slight decrease in university-related orders, there was an increase in orders from companies. As
a result, net sales of the System Operations and Infrastructure Development business increased 6.9% from the same
period of the previous fiscal year to ¥3,576 million.
3) Product Sales
AIT recorded favorable sales, mainly in the financial sector and medical sector. As a result, net sales of the Product
Sales business increased 15.7% from the same period of the previous fiscal year to ¥13,206 million.
(Outlook for the Next Fiscal Year)In the next fiscal year, there is a risk that decreased demand in reaction to a surge prior to an increase in the4

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

consumption tax rate and a slowing of overseas economies could put downward pressure on the economy.
Nevertheless, there are expectations that the Japanese economy will remain on a recovery track owing to such factors
as increases in household income and investments.
In the information services industry, a full-fledged recovery is expected on the back of increased IT investments in
manufacturing industries, where a pick-up had been lagging.
Under these conditions, in the last year of its Medium-Term Management Plan, the SRA Group will increase andstrengthen profitability and expand its business scale by accelerating efforts for “undertaking structural reforms inexisting businesses.” At the same time, the SRA Group will aim to secure growth potential by our “own IP products
business” x “overseas business,” which is our medium- and long-term growth strategy.
Regarding the outlook for consolidated results for the fiscal year ending March 2015, while implementing theabove measures, we forecast net sales of ¥37,300 million, operating income of ¥3,260 million, ordinary profit of¥3,460 million and net income of ¥2,230 million.
(2) Analysis of Financial Position
Total assets at the end of the fiscal year amounted to ¥29,527 million, an increase of 5.0% from the end of theprevious fiscal year. Total liabilities increased 15.5% from the end of the previous fiscal year to ¥12,443 million andnet assets decreased 1.6% to ¥17,083 million from the end of the previous fiscal year. Details of the principal
increases and decreases from the end of the previous fiscal year are as follows.
(Total Assets)
Short-term investment securities increased ¥2,110 million to ¥3,112 million due to the transfer of investment
securities to current assets. Notes and accounts receivable—trade increased ¥555 million to ¥6,855 million due to arise in trade receivables. Work in process increased ¥418 million to ¥1,430 million due to such factors as a rise incontracted development projects.
On the other hand, investment securities declined ¥3,519 million to ¥3,618 due to the transfer to current assets.
(Total Liabilities)
Accounts payable—trade increased ¥764 million to ¥3,211 million due to an increase in trade payables. Income taxes
payable increased ¥358 million to ¥882 million due to a rise in corporate taxes.
On the other hand, provision for bonuses declined ¥43 million to ¥550 million.
(Total Net Assets)
Retained earnings increased ¥1,543 million to ¥14,332 million. Foreign currency translation adjustments whenconverting the impact of exchange rates on overseas subsidiaries increased ¥377 million to a positive ¥229 million.
Conversely, treasury stock increased ¥1,432 million to negative ¥2,826 million due to the acquisition of treasury
stock.
Cash and cash equivalents on a consolidated basis at the end of the fiscal year increased ¥411 million comparedwith at the previous fiscal year-end to ¥7,909 million.
The status of cash flows and factors underlying changes in cash flows for the fiscal year are shown below.
Cash Flows from Operating Activities
Net cash provided by operating activities amounted to ¥2,131 million compared with ¥1,622 million in the previous
5

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

fiscal year. This consisted mainly of such cash inflows as income before income taxes and minority interests of¥3,623 million, an increase in notes and accounts payable—trade of ¥721 million and depreciation and amortizationof ¥416 million, while cash outflows were primarily income taxes paid of ¥1,106 million, an increase in inventoriesof ¥468 million and an increase in notes and accounts receivable—trade of ¥377 million.
Cash Flows from Investing Activities
Net cash provided by investing activities amounted to ¥192 million compared with net cash used in investing
activities of ¥2,896 million in the previous fiscal year. This consisted mainly of such inflows as ¥940 million inproceeds from sales of investment securities and ¥154 million from the collection of loans receivable, while outflows
included ¥769 million for payments of loans receivable and ¥122 million for purchase of intangible assets.
Cash Flows from Financing Activities
Net cash used in financing activities amounted to ¥2,065 million compared with ¥906 million in the previous fiscal
year). This was due mainly to such cash inflows as ¥91 million in proceeds from exercise of stock options and suchcash outflows as ¥1,544 million for the purchase of treasury stock and ¥591 million in cash dividends paid.
Cash Flow Indicators
FY2012
Shareholders’ equity ratio (%)
Shareholders’ equity ratio at market
value (%)
Debt redemption years to cash flow
(years)Interest coverage ratio (times)

FY2013

FY2014

57.0

61.6

57.7

46.1

49.2

56.0

0.7

0.9

0.7

96.0

56.5

83.9

Notes:
Shareholders’ equity ratio: Shareholders’ equity/total assets
Shareholders’ equity ratio at market value: Market capitalization/total assets
Debt redemption years to cash flow: Interest-bearing debt/operating cash flow
Interest coverage ratio: Operating cash flow/interest expense
1. All indicators were calculated using consolidated financial figures.
2. Market capitalization is calculated using the total number of shares outstanding at the end of the fiscal period
excluding treasury shares.
3. Cash flows from operating activities is used for cash flow.
4. Interest-bearing debt includes all debt that pays interest as listed on the Consolidated Balance Sheets.
(3) Basic Policy on Profit Allocation and Dividends for the Fiscal Year under Review and the Next Fiscal Year
The Company’s basic policy with respect to dividends is to actively make business investments for securing earnings
power and growth potential with the aim of increasing the corporate value of the SRA Group. At the same time, theCompany aims to allocate profits with a consolidated dividend payout ratio of 20% to enhance the redistribution of
profits to shareholders.
Accordingly, one of the Company’s management targets is to “achieve and maintain double-digit consolidated
ROE” and we aim to carry out management that emphasizes the efficient use of shareholders’ equity.
Regarding dividends for the fiscal year ended March 31, 2014, in accordance with our basic dividend policy, the6

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

Company will pay regular cash dividends per share of ¥40.00.
Regarding dividends for the fiscal year ending March 31, 2015, we plan to increase ordinary dividends per shareby ¥5.00 and pay cash dividends per share of ¥45.00. In the event that these dividends are paid, the consolidated
payout ratio will be 24.1%.
To the present, the Company paid annual dividends only at the end of each fiscal year. From the perspective of
appropriately redistributing profits to shareholders and as a result of deliberations on this matter, from the next fiscal
year the Company will pay interim dividends and intends to pay interim cash dividends per share of ¥17.00 and
year-end dividends of ¥28.00 for total annual dividends per share of ¥45.00.
Along with the payment of interim dividends, from the next fiscal year the Company will eliminate its
shareholder special benefit plan that was commenced from the fiscal year ended March 31, 2008 (under this plan, theCompany presented three rice gift certificates to those shareholders with 100 or more shares and who were listed in
the shareholders’ registry as of September 30 of each year).
We also regard the acquisition of treasury shares as an effective means of redistributing profits to shareholders.
Accordingly, we make such acquisitions appropriately while considering such factors as our stock price trends andfinancial condition.
(4) Business and Other Risks
The following principal risks could have an impact on the business results and financial condition of the Company as
the Group’s controlling company.
“Forward-looking” statements contained in this report represent judgments by the Group based on information
currently available to management as of the end of the fiscal period.
[1] Risk of fluctuations in business results of Group companies
An abrupt fluctuation in business results of Group companies due to various factors could have an adverse impact on
the Company’s business results.
[2] Maintaining confidentiality of customer information
In addition to being aware that it is an information processing company with numerous opportunities for handlingpersonal information, the SRA Holdings Group also sufficiently recognizes the critical nature of protecting personal
information, and thus, has established an internal monitoring structure. Concurrently, the SRA Holdings Group
provides education for its Group employees and business partners and makes efforts to protect personal information.
However, in the event of the unexpected leakage of information, besides losing the trust of business partners, the SRA
Holdings Group could become liable for payment of compensatory damages, which could have an effect on theGroup’s business results.
[3] Overseas Business Investments
As part of its business strategy, the SRA Group implements a policy of utilizing its “global reach,” which is a strength,
and actively makes business investments that include forming business and capital alliances with local companies andcarrying out M&A with the aim of cultivating overseas growth markets.
When making business investments, besides implementing preliminary surveys, the Company sufficiently
exchanges opinions with the management teams of the companies in which we invest. Following the investment as
well, we regularly manage the state of progress of businesses.
Nevertheless, the Company’s overseas businesses could inevitably be exposed to country risk due to factors such
7

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014as unforeseen rapid public unrest, market deterioration and exchange rate volatility or differences in politics, cultures,
systems, laws and business practices. Additionally, there is a possibility of changes of the management team, capital
structure and business strategies of investee companies. Such factors could prevent the Company from realizing
expected profits and lead to losses that could have an impact on the Company’s business results.
In addition to the above, the Company comprehensively incurs business and other risks of the SRA HoldingsGroup, which consists of SRA, a main subsidiary, and its subsidiaries.
The following principal risks could have an impact on the business results and financial condition of the SRA
Holdings Group.
[1] Responses of business partners when production volume fluctuates
In the Systems Development and the System Operations and Infrastructure Development businesses, besides its own
in-house engineers, the SRA Holdings Group utilizes business partners for the planned augmentation of its staff ofin-house engineers and expansion of business, as well as to augment those areas where it does not possess
technologies and to respond flexibly to changes in production volumes during peak production.
The SRA Holdings Group also utilizes business partners as one means of reducing production costs.
Nonetheless, in the event of a sudden unforeseen fluctuation in production volume, the inability to secure enoughbusiness partners possessing requisite skills or to arrange for business partners to take timely action could have an
impact on the Group’s business results.
[2] Project profitability in Systems Development
In the core Systems Development business, the SRA Holdings Group concludes bulk subcontracting contracts,
whereby it handles the entire system development and is responsible to its customers for completion. Therefore, evenfor projects for which a certain amount of income is expected at the time the order is received, there are instances
when profitability worsens because of such factors as customer requests for specification changes after commencing
development activities or a work process that exceeds the initial estimate. Moreover, incurring additional expenses
such as those related to defect guarantees after the confirmation of sales could result in lower profitability.
To prevent the occurrence of these projects, the Group reviews risk factors at the time an order is received andworks to improve the precision of its estimates while strengthening its project management structure in an organizedmanner. Nevertheless, any project incurring a large loss could have an effect on the Group’s business results.
[3] Maintaining confidentiality of customer information
Along with being aware that it is an information processing company with numerous opportunities for handlingpersonal information, the Group also sufficiently recognizes the critical nature of personal information, and thus, hasestablished an internal monitoring structure. Concurrently, as a company that has acquired Privacy Mark certification,
the SRA Holdings Group provides education for its Group employees and outsourced staff and makes efforts toprotect personal information. However, in the event of the unexpected leakage of information, besides losing the trustof business partners, the SRA Holdings Group could become liable for payment of compensatory damages, which
could have an effect on the Group’s business results.

2. Management Policy(1) The Company’s Basic Management Policy
The SRA Holdings Group adheres to a basic management policy of maximizing user satisfaction through IT based on
8

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014its management principle of “contributing to the future of humanity through professional practice that fosters progressin the fields of computer science,” which has been our guiding principle since the founding of SRA. In accordancewith this basic management policy, amid a rapidly changing business environment, we will strive to meet the
expectations of the information services industry while raising profits for shareholders and increasing corporate value
by pursuing profitability and growth.
Regarding the management of the SRA Holdings Group, under our management vision of “creating new value
together with people through a global perspective and technologies,” we will raise the overall capabilities of theGroup with the aim of enhancing corporate value.
(2) Management Indicator Targets
The SRA Holdings Group has adopted “ordinary profit margin” as a representative indicator of the Company’s
overall earnings power and has set the medium- and long-term numerical target of quickly attaining and maintaining
an ordinary profit margin of 10% or higher.”Also, the SRA Holdings Group continues to use return on equity (ROE) as an indicator of efficient deployment ofshareholders’ equity. The Group has established the numerical target of “attaining and maintaining double-digit
consolidated ROE.”
The Group’s consolidated ordinary profit margin and ROE are as shown below.
Consolidated ordinary profit margin

Consolidated ROE

FY2010 (actual)

6.0%

8.5%

FY2011 (actual)

7.2%

8.6%

FY2012 (actual)

7.9%

7.9%

FY2013 (actual)

9.0%

10.2%

FY2014 (actual)

9.5%

12.4%

FY2015 (target)

9.3% (plan)

12.5% (plan)(3) Medium- and Long-term Management Strategy
With the aim of further raising profitability, the SRA Group has formulated and will implement a new Medium-Term
Management Plan running from the fiscal year ending March 2012 through the fiscal year ending March 2015. A
summary of the plan is as follows.
1.

Management Targets[1] Increase and strengthen profitability by undertaking structural reforms in existing businesses• Surpass the all-time high net income of ¥2.22 billion in the final fiscal year
[2] Medium- and Long-Term Growth Strategies• Promote our own IP products business (Generate 10% of consolidated sales in fiscal 2014)• Undertake new business overseas (Generate 20% of consolidated sales in fiscal 2016)
2.

Management Strategies (Measures for Attaining Management Objectives)[1] Undertake structural reforms• Increase and strengthen profitability by fortifying the foundation of existing businesses• Expand orders and sales by strengthening business capabilities• Build a high-profit production structure

9

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

• Transform to a cost structure appropriate for our business scale[2] Medium- and Long-term Management Strategy (“our own IP products business” x “overseas business”)• Fully promote “our own IP products business”
Offer our own company IP products in growth fields (including advanced, high-profit products in Japan and overseas)• Undertake new overseas business
Undertake business in growth markets (China, India and ASEAN, etc.)(4) Issues to Be Addressed by the Company
The SRA Group will address the following specific issues with regard to the aim of the Medium-Term Management
Plan to “increase and strengthen profitability by undertaking structural reforms in existing businesses” as well as“secure the Group’s growth potential by fully promoting our own IP products business and undertaking new businessoverseas.”■Increase and strengthen profitability by undertaking structural reforms in existing businesses
1. Expand orders and sales by strengthening business capabilities[Systems Development]・Create new projects through proposal-based sales that utilize our “strengths”
・Strengthen our project order management structure that ensures projects reliably and efficiently lead to the securingof new orders
・Specialize in fields of expertise in existing businesses (manufacturing embedded systems, financial, education)
・Transform business models for an expansion in orders (advance into the healthcare field, etc.)[System Operations and Infrastructure Development]
・Make responses to customer needs (cost reductions, quality improvements, etc.) that utilize our experience insystem operations
・Concentrate efforts toward education-related network operation business・Respond to virtualization and cloud computing in IDC[Product Sales]
・Expand target customers in device sales (manufacturing, securities, insurance, etc.)
・Expand collaborative business with manufacturers that utilizes our competitive advantage in cloud computing

fields・Expand sales of our own IP products

2. Build a high-profit production structure[1] Ensure appropriate production overhead costs[2] Increase the profitability of projects[3] Actively utilize offshore development
3. Transform to a cost structure appropriate for our business scale
・Ensure appropriate production costs and SG&A expenses
10

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

■Secure the Group’s growth potential by fully promoting our own IP products business and undertaking new
overseas business
1. Further promote “our own IP products business” x “overseas business”[1] Invest in U.S. venture companies that handle cutting-edge products in growth fields (Cavirin Systems, Inc., which

engages in the data center automation business through cloud computing, and Proxim Wireless Corporation, which
carries out the wireless network business)[2] Invest in Kingnet, of China, with the aim of building sales channels in growth markets (China, India, ASEAN,

etc.)
2. Expand China business by making business investments in SJI, Inc. (SRA’s acceptance of that company’s callable
unsecured convertible bond-type corporate bonds with share acquisition rights, etc.)
3. Expand business for our own IP products business (comprehensive education solutions UniVision, mail archive
MailDepot, digital content service BELEGA-DC and EC building service BELEGA-EC, etc.) and develop and sellour own new IP products(5) Other Important Management Matters
None

11

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of Yen)FY2013(as of March 31, 2013)

FY2014(as of March 31, 2014)ASSETS
Current assets:
Cash and deposits

7,197

7,689

Notes and accounts receivable—trade

6,299

6,855

Short-term investment securities

1,002

3,112

Merchandise and finished goods

242

300

Work in process

1,011

1,430

Deferred tax assets

531

546

Other

1,222

2,208

Allowance for doubtful accounts

(35)

(27)

17,473

22,117

Buildings

349

346

Accumulated depreciation

(253)

(249)

Buildings, net

96

97

Machinery, equipment and vehicles

569

575

Accumulated depreciation

(522)

(517)

Machinery, equipment and vehicles, net

46

58

Other

119

114

Accumulated depreciation

(77)

(75)

Other, net

42

39

Total property, plant and equipment

184

195

Other

894

672

Total intangible assets

894

672

Investment securities

7,137

3,618

Deferred tax assets

1,049

1,421

Guarantee deposits

402

370

Other

1,093

1,249

Allowance for doubtful accounts

(14)

(13)

Allowance for investment loss

(87)

(104)

Total investments and other assets

9,580

6,542

10,6607,410

28,13329,527

Total current assets
Noncurrent assets:
Property, plant and equipment

Intangible assets

Investments and other assets

Total noncurrent assets
Total assets
12

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

(Millions of Yen)FY2013(as of March 31, 2013)

FY2014(as of March 31, 2014)

LIABILITIESCurrent liabilities:
Accounts payable—trade

2,447

3,211

Short-term loans payable

1,229

1,509

Accrued expenses

590

583

Income taxes payable

523

882

Accrued consumption taxes

241

255

Provision for bonuses

594

550

Provision for directors’ bonuses

50

50

Provision for loss on construction contracts

181

416

Asset retirement obligations

17

18

Other

807

851

6,683

8,329

Long-term loans payable

300–

Deferred tax liabilities

3

9

3,620

–

–

3,926

165

161

0

17

4,090

4,114

10,774

12,443

Capital stock

1,000

1,000

Capital surplus

4,483

4,475

Retained earnings

12,78914,332

Treasury stock(1,393)(2,826)

Total shareholders’ equity

16,87916,982

Valuation difference on available-for-sale securities

588

238

Foreign currency translation adjustments

(148)

229

Remeasurements of defined benefit plans

–

(399)

439

68

39

32

Total net assets

17,35917,083

Total liabilities and net assets

28,13329,527

Total current liabilities
Noncurrent liabilities:

Provision for retirement benefits

Net defined benefit liability
Provision for directors’ retirement benefits
OthersTotal noncurrent liabilities
Total liabilities
NET ASSETS
Shareholders’ equity

Accumulated other comprehensive income

Total accumulated other comprehensive income
Subscription rights to shares

13

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of Yen)FY2013(April 1, 2012March 31, 2013)
32,168FY2014(April 1, 2013March 31, 2014)35,146

Cost of sales

26,09428,659Gross profit

6,074

6,487

Selling, general and administrative expenses

3,637

3,679

Operating income

2,436

2,807

Interest received

201

193

Dividends received

37

49

Foreign exchange gains

176

133

Guarantee commission received

5

89

Other

85

101

Total non-operating income

507

568

Interest expenses

29

25

Transfer agent processing fee

20

24

Other

10

1

Total non-operating expenses

60

51

2,883

3,324

Gain on revision of retirement benefit plans

–

297

Other

16

14

Total extraordinary income

16

312

Loss on retirement of noncurrent assets

33

Loss on valuation of stocks of subsidiaries and affiliates–

4

Loss on liquidation of subsidiaries and affiliates

–

4

Other

11

0

Total extraordinary loss

15

13

Income before income taxes and minority interests

2,884

3,623

Income taxes-current

1,120

1,461

Income taxes-deferred

83

27

Total income taxes

1,203

1,488

Income before minority interests

1,681

2,134

Net income

1,681

2,134

Net sales

Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income

Extraordinary loss

14

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

(Consolidated Statements of Comprehensive Income)
1,681

2,134

297

(349)

225

377

523

27

Comprehensive income

2,204

2,162

(breakdown)Comprehensive income attributable to parent
company shareholders
Comprehensive income attributable to minority
shareholders

2,204

2,162

－

－

Income before minority interests
Other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustments
Total other comprehensive income

15

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

(3) Consolidated Statements of Changes in Net Assets
FY2013 (April 1, 2012-March 31, 2013)(Millions of Yen)
Shareholders’ equity
Total

CapitalCapitalRetained

Treasurystock

surplusearnings

stock

shareholders’equityBalance at beginning of period

1,000

4,483

11,642(1,393)

15,732

Changes of items during the period
Dividends from surplus

(525)

(525)

Net income

1,681

1,681

Purchase of treasury stock

(0)

(0)

Disposal of treasury stock–

Change of scope of consolidation

(8)

(8)

Net change of items other thanshareholders’ equity
Total change during the period
Balance at the end of current period

–
－

－

1,146

(0)

1,146

1,000

4,483

12,789(1,393)

16,879

Accumulated other comprehensive income
Valuation

Balance at beginning of period

difference on

currency

available-for-translation

sale securities

adjustment

290

Remeasure-Totalments ofaccumu-definedlated otherbenefitcomprehen-plans

sive income

Foreign

(373)

－

(83)

Subscription

Total netrights toassetsshares29

15,678Changes of items during the period
Dividends from surplus(525)

Net income

1,681

Purchase of treasury stock(0)

Disposal of treasury stock–

Change of scope of consolidation(8)

Net change of items other thanshareholders’ equity

297

225

–

523

10

533

Total change during the period

297

225

–

523

10

1,680

Balance at the end of current period

588

(148)

–

439

39

17,35916

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

FY2014 (April 1, 2013-March 31, 2014)(Millions of Yen)
Shareholders’ equity
Total

CapitalCapitalRetained

Treasurystock

surplusearnings

stock

shareholders’equityBalance at beginning of period

1,000

4,483

12,789(1,393)

16,879Changes of items during the period
Dividends from surplus

(591)

(591)

Net income

2,134

2,134

Purchase of treasury stock
Disposal of treasury stock(1,544)(1,544)

111

104

(7)

Change of scope of consolidation–

Net change of items other thanshareholders’ equity–

Total change during the period
Balance at the end of current period

－

(7)

1,543

(1,432)

102

1,000

4,475

14,332(2,826)

16,982

Accumulated other comprehensive income
Valuation

Balance at beginning of period

difference on

currency

available-for-translation

sale securities

adjustment

588

Remeasure-Totalments ofaccumu-definedlated otherbenefitcomprehen-plans

sive income

Subscription

Foreign

(148)

－

439

Total netrights toassetsshares39

17,359Changes of items during the period
Dividends from surplus(591)

Net income

2,134

Purchase of treasury stock(1,544)

Disposal of treasury stock

104

Change of scope of consolidation
Net change of items other thanshareholders’ equity

–
(349)

377

(399)

(371)

(6)

(377)

Total change during the period

(349)

377

(399)

(371)

(6)

(275)

Balance at the end of current period

238

229

(399)

68

32

17,08317

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

(4) Consolidated Statements of Cash Flows(Millions of Yen)FY2013(April 1, 2012March 31, 2013

FY2014(April 1, 2013March 31, 2014

Net cash provided by (used in) operating activities:
Income before income taxes and minority interests

2,884

3,623

Depreciation and amortization

453

416

Increase (decrease) in provision for retirement benefits(41)(3,622)

Increase (decrease) in net defined benefit liability

–

3,305

Increase (decrease) in provision for directors’ retirement benefits

11

(3)

Increase (decrease) in provision for bonuses

(22)

(44)

Increase (decrease) in provision for directors’ bonuses(8)–

Increase (decrease) in allowance for doubtful accounts

6(9)

Increase (decrease) in allowance for investment loss

0

(2)

(239)

(243)

Interest expense

29

25

Loss (gain) on valuation of investment securities

10–

Loss (gain) on sales of investment securities

(11)

(5)

Loss on valuation of stocks of subsidiaries and affiliates－

4

Loss (gain) on sales of noncurrent assets

(0)

(0)

Loss on retirement of noncurrent assets

33

Decrease (increase) in notes and accounts receivable—trade

227

(377)

Decrease (increase) in inventories

80

(468)

Increase (decrease) in notes and accounts payable—trade

(390)

721

Increase (decrease) in other liabilities

(140)

24

Increase (decrease) in accrued consumption taxes

(49)

13

Other, net

(131)

(242)

Subtotal

2,671

3,118

Interest and dividends income received

142

144

Interest expenses paid

(28)

(25)

Income taxes paid

(1,163)(1,106)

Net cash provided by operating activities

1,622

2,131

(42)

(61)

2

0

Purchase of intangible assets

(172)

(122)

Purchase of investment securities

(674)

(67)

Proceeds from sales of investment securities

820

940

Proceeds from liquidation of subsidiaries and affiliates

10

82

Payments of loans receivable(3,600)(769)

Collection of loans receivable

505

154

Payments into time deposits

－

(80)

Interest and dividend income

Net cash provided by (used in) investing activities:
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment

18

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

Payments for guarantee deposits

(4)

(20)

Proceeds from collection of guarantee deposited

15

51

Other, net

244

85

(2,896)

192

(380)

(20)

(0)

(1,544)

(525)

(591)

Proceeds from exercise of stock option

－

91

Other

(0)

(0)

(906)

(2,065)125

153

Net increase (decrease) in cash and cash equivalents(2,054)

411

Cash and cash equivalents at beginning of period
Change of scope of net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at the end of period

9,496

7,497

55

－

7,497

7,909

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities:
Net increase (decrease) in short-term loans payable
Purchase of treasury stock
Cash dividends paid

Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents

19

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

(Change in Accounting Policies)
Effective from the year ended March 31, 2014, the Company adopted the Accounting Standard for Retirement
Benefits (ASBJ Statement No. 26, May 17, 2012, hereafter, “Standard”) and Guidance on Accounting Standard for
Retirement Benefits (ASBJ Guidance No. 25, May 17, 2012, hereafter, “Guidance”), except for items stated inparagraph 35 of the Standard and paragraph 67 of the Guidance. In accordance with this adoption, accounting
treatment for retirement benefits has been changed to record net defined benefit liability, which is calculated bysubtracting the amount of plan assets from retirement benefit obligations and posting unrecognized actuarial
gains/losses and unrecognized prior service costs in net defined benefit liability.
The adoption of the Standard and the Guidance conforms with the transitional treatment stipulated by paragraph
37 of the Standard and the effect of the said change is adjusted in remeasurements of defined benefit plans ofaccumulated other comprehensive income at the end of the fiscal year ended March 31, 2014.
As a result, net defined benefit liability of ¥3,926 million was recorded and accumulated other comprehensive
income decreased ¥399 million.
Net assets per share declined ¥33.42.

(Additional information)
Consolidated subsidiary SRA previously adopted a defined-benefit corporate pension as a retirement benefit scheme.
However, from March 1, 2014 it transitioned to a defined-contribution pension for its currently active employees. As
accounting treatment accompanying this transition, the company has adopted Accounting for Transitions in
Retirement Benefit Plans (ASBJ Guidance No. 1). Along with this transition, the company recorded ¥297 million ingain on revision of retirement benefit plans as extraordinary income.

20

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

Segment Information and Others
Segment Information
1. Summary of Reporting Segments
The Group’s reporting segments are those for which financial information separate from that of other units comprising theGroup can be obtained. Periodic reviews are made of reporting segments by the Board of Directors for determining theallocation of management resources and assessment of business results.
The Company carries out overall management of subsidiaries engaged in the three businesses of “Systems
Development,” “System Operations and Infrastructure Development” and “Product Sales.” Therefore, the Group’s threereporting segments are “Systems Development,” “System Operations and Infrastructure Development” and “Product
Sales.”

Principal contents of business in each segment
Content of businessBusiness segment

Integrated system development ranging from defining requirements todevelopment and maintenance of mainframe-based large systems



System integration covering system planning, development andintroduction of open systems

Systems Development



Solutions business offering business tools that utilize various products
and tools

Open source business that offers technical support for systems
through open source software

SystemOperations

andInfrastructure Development

Product SalesOperation management of computer systems and network systems

Overall operation that includes data management and facilities
management

Building of network systems



Outsourcing services

Sales of packaged software that includes licensingSales of system devices, centering on servers, in integration servicesConsulting services related to the introduction of IT

2. Accounting Treatment Method of Net Sales and Income or Losses, Assets, Liabilities and Others for Each
Reporting Segment
The accounting treatment method for the reporting business segments is the same as that described in Principal Items that
Serve as the Basis for Preparing the Consolidated Financial Statements.
Inventories are valued at an amount prior to the writing down of carrying value.
The figures for segment profits are on the basis of operating income.
Intersegment sales or transfers are based on current market prices.

3. Information Concerning Net Sales and Income or Losses, Assets, Liabilities and Others for Each Reporting
Segment

21

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

I. Fiscal 2013 (from April 1, 2012 to March 31, 2013)(Millions of Yen)
AmountSystemrecorded on

Operations

Systems
Development

Product

andInfrastructure

Sales

the

Adjustment

Total

*1

consolidated

amountstatements ofDevelopment

income *2

Sales(1) Sales to
17,407

3,344

11,41632,168－32,168

65

351

509

926

(926)

－

Total sales

17,473

3,696

11,92533,095(926)

32,168Operating income

2,375

703

561

3,640

(1,204)

2,436

Assets

8,135

1,294

5,443

14,873

13,26028,133

166

13

268

448

5

453

43

9

152

205

－

205

customers(2) Intersegment
sales ortransfers

OthersDepreciation
Increase of
tangible andintangible
assets
Notes:
1. The adjustment amounts are as follows:(1) The segment income adjustment of minus ¥1,204 million is a company-wide expense not apportioned to any reporting
segment. Company-wide expenses are general and administrative expenses and R&D expenses not attributed to any
reporting segment.
(2) Total Company assets amounted to ¥13,260 million for the fiscal year. These consisted mainly of the Group’s surplus
operating assets (cash, deposits and marketable securities), short-term loans receivable, long-term invested assets(investment securities and long-term loans receivable) and deferred tax assets.
(3) Depreciation expenses and increases of tangible and intangible assets included depreciation and additions to long-term
prepaid expenses, respectively.

2. Segment operating income is adjusted in operating income on the consolidated statements of income.

22

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

II. Fiscal 2014 (from April 1, 2013 to March 31, 2014)(Millions of Yen)
AmountSystemOperations

Systems
Development

andInfrastructurerecorded on
Product
Sales

theAdjustment

Total

*1

consolidated

amountstatements ofDevelopment

income *2

Sales(1) Sales to18,364

3,576

13,20635,146－35,146

41

288

499

830

(830)

－

Total sales

18,406

3,864

13,70535,977(830)

35,146

Operating income

2,265

814

929

4,010

(1,202)

2,807

Assets

8,983

1,282

6,361

16,627

12,90029,527

153

14

245

413

3

416

73

15

90

179

－

179

customers(2) Intersegment
sales ortransfers

OthersDepreciation
Increase of
tangible andintangible
assets
Notes:
1. The adjustment amounts are as follows:(1) The segment income adjustment of minus ¥1,202 million is a company-wide expense not apportioned to any reporting
segment. Company-wide expenses are general and administrative expenses and R&D expenses not attributed to any
reporting segment.
(2) Total Company assets amounted to ¥13,180 million for the fiscal year. These consisted mainly of the Group’s surplus
operating assets (cash, deposits and marketable securities), short-term loans receivable, long-term invested assets(investment securities and long-term loans receivable) and deferred tax assets.
(3) Depreciation expenses and increases of tangible and intangible assets included depreciation and additions to long-term
prepaid expenses, respectively.

2. Segment operating income is adjusted in operating income on the consolidated statements of income.

23

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

(Significant Subsequent Events)
1. Granting of Stock Options Linked to the Medium-Term Management PlanAt the Board of Directors Meeting convened on April 15, 2014, the Board resolved to issue stock options as detailed
below and allotted the stock options on May 1, 2014. This resolution was in response to a previous resolution passed
at the Company’s 23rd Ordinary Meeting of Shareholders convened on June 26, 2013 to entrust to the Board of
Directors with the issuing of subscription rights to shares in the form of stock options to the Company’s Board of
Directors and employees as well as to the Board of Directors, executive officers and employees of subsidiaries. The
stock options are issued with the aim of attaining the Medium-Term Management Plan from the Company’s 22nd
fiscal term (the term ended March 31, 2012) to the 25th fiscal term (the term ending March 31, 2015).
1) Details of stock options, upper limit on number of options, consideration price and name(1) Details of subscription rights to shares<1> Name of the stock options: SRA Holdings 11th subscription rights to shares<2> Number issued: 780 subscription rights<3> Issuance price: No charge<4> Total value of share issuance: ¥242,892,000<5> Number and type of shares allotted to subscription rights to shares:
156,000 common shares of the Company (Number of shares per one (1) subscription right shall be 200
shares (hereafter, “number of granted shares”))
In the event of a stock split of common shares (includes no charge stock allotments) or in the event of astock consolidation, the number of granted shares shall be adjusted using the following formula. However,such adjustment shall be made only in respect of the number of granted shares of subscription rights toshares which are not exercised at that time and any fractions less than one (1) share resulting from suchadjustment shall be disregarded.
Number of granted shares after adjustment ＝ Number of granted shares before adjustment × Split or consolidation ratio

In the event the Company is the surviving company following a merger with another company, or if theCompany carries out a share exchange with another company and becomes a wholly owning parent company
through a share exchange or also in the event the Company must adjust the number of granted sharespursuant to the aforementioned cases, the Company may also appropriately adjust the number of granted
shares to a reasonable and necessary extent.
<6> Value of assets to be invested when subscription rights to shares are exercised
Value of assets to be invested when subscription rights to shares are (when one (1) subscription right toshares is) exercised shall be the exercise price (hereafter the exercise price) per one (1) share multiplied bynumber of granted shares per one (1) subscription right to shares. The exercise price shall be ¥311,400 per
one (1) subscription right to shares (¥1,557 per one (1) share).
In the event the Company carries out a stock split or consolidation, the exercise price shall be adjusted
using the following formula and any fractions less than ¥1 resulting from such adjustment shall be roundedup.
Exercise price after adjustment ＝ Exercise price before adjustment ×24

1
Split or consolidation ratio

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

In the event of the issuance of new shares or disposition of treasury stock at a price less than the market
price (excluding the issuance of new shares through the execution of subscription rights to shares), theExercise Price shall be adjusted using the following formula and any fractions less than ¥1 resulting fromsuch adjustment shall be rounded up.

Exercise priceafter adjustment ＝Exercise pricebefore adjustment

Number of shares issued
and outstanding＋

Number of shares newly issued × Subscription price per one (1) share
Share price before new issue

×

Number of shares issued and outstanding ＋ Number of shares newly issued

In the formula above, “Number of shares issued and outstanding” shall mean the number calculated by
the number of outstanding shares less the number of treasury stock held by the Company. In the event of thedisposition of treasury stock, “Shares newly issued” and “Subscription price per one (1) share” shall be readas “Treasury stock disposed” and “Disposal price per one (1) share,” respectively.
In the event the Company is the surviving company following a merger with another company, or if theCompany carries out a share exchange with another company and becomes a wholly owning parent company
through a share exchange or also in the event the Company must adjust the exercise price pursuant to theaforementioned cases, the Company may also appropriately adjust the exercise price to a reasonable andnecessary extent.
<7> Exercise period for subscription rights to shares
From July 1, 2015 to June 30, 2017<8> Matters concerning capital and capital reserve upon issuance of shares by exercise of subscription rights toshares[1] The amount of the increase in capital upon issuance of shares by exercise of subscription rights to sharesshall be 50% of the maximum increase amount of capital, etc., as calculated according to the Company
Accounting Regulations, Article 17, Paragraph 1, with any fraction of less than ¥1 being rounded up.
[2] The amount of the increase in capital reserves upon issuance of shares by exercise of subscription rights toshares shall be the amount after deducting the increase in capital calculated in the above [1] from the
maximum increase amount of capital, etc., listed in the above [1].
<9> Restrictions on acquiring subscription rights to shares through a transfer
Approval through a resolution by the Board of Directors of the Company shall be required for acquiring
subscription rights to shares through a transfer.
<10> Conditions for acquiring subscription rights to shares
In the event of any action specified in Article 236-1-8-(a) to (e) of the Corporate Law of Japan, the Company
may cancel without charge all of the said subscription rights to shares.
<11> Matters concerning the granting of subscription rights to shares in time of organizational restructuring
In the event of any action specified in Article 236-1-8-(a) to (e) of the Corporate Law of Japan, subscription
25

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

rights to shares of an entity (hereafter “surviving company or other”) prescribed in the aforementioned (a) to(e) shall be granted to the Company’s holders of subscription rights to shares. However, for mergers,
absorption-type company splits or share exchanges, this shall be conditional on receiving the consent of theother party to the merger agreement, absorption-type company split agreement, or share exchange agreement.
Additionally, the number of granted shares for the subscription rights to shares of the “surviving company orother” that have been issued as well as the exercise price shall be in accordance with the allocation ratio. The
other contents of the subscription rights to shares shall be equal to those of the Company’s subscription
rights to shares. However, the Company may change these at its discretion based on its judgments.
<12> Conditions for exercising subscription rights to shares[1] The holders of the subscription rights to shares shall be able to exercise the rights only when ordinary profit
on the final Consolidated Statements of Income for the Company’s 25th fiscal term (the fiscal year ending
March 2015) or for any prior fiscal term exceeds ¥3.6 billion or when net income for the same period
exceeds ¥2.23 billion (hereafter “exercise standard target value”). However, in the event of such factors as anabrupt change in the management environment, the “exercise standard target value” may be changed within arange of ± 30% based on a resolution by the Board of Directors.
[2] Even during the period for exercising the subscription rights to shares, persons who are not directors andemployees of the Company or directors, managing officers and employees of the Company’s subsidiaries
shall not be allowed to exercise the subscription rights. However, this shall not be applied in cases in which aperson leaves their position due to the expiration of the term of Director or mandatory retirement or for any
other due reason.
[3] Inheritance of subscription rights to shares shall not be allowed[4] The Board of Directors shall be able to attach other necessary conditions. However, conditions attached by the
Board of Directors shall be effective only when stipulated by a “subscription rights to shares allocationagreement” concluded between the Company and the persons eligible for the allocation of subscription rights
to shares.
2) Reason for soliciting persons to receive subscription rights to shares through particularly beneficial
conditions
Subscription rights to shares shall be provided without charge with the aims of raising motivation and morale.

2. New loan
The Board of Directors of Company subsidiary SRA convened on April 15, 2014 and resolved to provide a new loan
to Cavirin Systems, Inc. and provided the loan on the same date with the aim of expanding business with thatcompany.
New loan(1) Amount of loan: US$800 thousand(2) Loan period: From April 24, 2014 to March 31, 2016
26

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

3. Extension of liability guarantee period
Subsidiary SRA provided a liability guarantee for short-term borrowings by SJI Inc., with which it has a businessalliance and capital alliance. However, based upon a request by that company for an extension of the guarantee period,
the Board of Directors of SRA passed a resolution and extended the liability guarantee period as detailed below at an
extraordinary meeting of the Board of Directors of SRA convened on April 30, 2014.
Amount of liability guarantee before change: ¥1,500 million
Period of liability guarantee: March 31, 2014
Amount of liability guarantee after change: ¥1,500 million
Period of liability guarantee: June 30, 2014

4. Extension of loan repayment period
Subsidiary SRA provided a loan to Kingnet with the aim of strengthening its relationship with that company.
However, the Board of Directors of SRA passed a resolution and extended the loan repayment period at an
extraordinary meeting of the Board of Directors of SRA convened on April 30, 2014.
Loan amount: US$8,000 thousand
Loan repayment period before change: April 30, 2014
Loan repayment period after change: July 31, 2014

(Additional information)
SRA, a Company subsidiary, filed a damage lawsuit against Happinet Corporation (hereafter Happinet) on March 31,
2011. In response, Happinet filed a lawsuit against SRA in the Tokyo District Court on April 6, 2011. These cases are
currently being litigated. In accordance with the progress of the lawsuits, we will promptly provide information on
any matters requiring disclosure.

27

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

4. Other Information
1. Status of Production, Orders and Sales(1) Production amounts
Production by segment in the fiscal year ended March 31, 2014 is as follows.
Consolidated cumulative total for
Segment information by type of businessfiscal 2014 (from April 1, 2013 to % change YoY
March 31, 2014)

Systems Development (Millions of Yen)
System Operations and Infrastructure
Development (Millions of Yen)
Total (Millions of Yen)

18,585

106.7

3,574

106.2

22,160106.6

Notes:
1. Amounts are based on sales price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

(2) Purchase amounts
Purchases by segment in the fiscal year ended March 31, 2014 are as follows.
Consolidated cumulative total for
Segment information by type of businessfiscal 2014 (from April 1, 2013 to % change YoY
March 31, 2014)

Product Sales (Millions of Yen)

8,377

119.1

Total (Millions of Yen)

8,377

119.1

Notes:
1. Amounts are based on purchase price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

(3) Status of orders
Status of orders by segment in the fiscal year ended March 31, 2014 is as follows.
OrdersSegment information by type of business

Order backlog

received(Millionsof% change YoY

System Operations and Infrastructure
Development

of % change YoY

Yen)

Yen)
Systems Development(Millions

19,940

112.0

5,835

137.0

3,734

109.6

1,622

110.8

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SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2014

Product Sales

12,727

115.0

2,727

85.1

Total

36,402

112.8

10,185

114.1

Notes:
1. Amounts are based on sales price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

(4) Sales amounts
Sales by segment in the fiscal year ended March 31, 2014 are as follows.
Consolidated cumulative total for
Segment information by type of businessfiscal 2014 (from April 1, 2013 to % change YoY
March 31, 2014)

Systems Development (Millions of Yen)

18,364

105.5

3,576

106.9

Product Sales (Millions of Yen)

13,206

115.7

Total (Millions of Yen)

35,146

109.3

System Operations and Infrastructure
Development (Millions of Yen)

Notes:
1. Amounts are based on sales price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

29